By DOUG SCHMITZ
Iowa Correspondent

DES MOINES, Iowa – The U.S. inventory of all hogs and pigs last month jumped to 2 percent from last quarter to 62.8 million head, with increased corn prices helping to drive pork profits, the USDA said in its Quarterly Hogs and Pigs Report, released June 29.

“The U.S. breeding herd continues to grow slowly, but it is now at its highest level since March 2002,” said Steve R. Meyer, Ph.D. Paragon Economics, Inc. in a media teleconference with U.S. farm reporters, sponsored by the Pork Checkoff in Des Moines.

“That should be no surprise since the industry has enjoyed very good profits and has seen little, if any, red ink due to higher corn prices – yet,” he said.

Chris Hurt, an extension agricultural economist at Purdue University, said the easing of concerns about dry weather was one of the primary reasons for lower corn prices, as well as increased volatility.

“Looking back over the last days, this week and the previous week, we’ve see July corn futures come down, almost a dollar a bushel and we see the December new crop corn futures contract down around 80 cents a bushel,” he said.

The June 1 report said the 62.8 million head of all U.S. hogs and pigs was up 2 percent from both June 1, 2006 and March 1, 2007, with breeding inventory, at 6.12 million head, up 1 percent from last year, and 2 percent from the previous quarter.

The report also said this quarter’s market hog inventory reached 56.6 million head, up 2 percent from both last year and last quarter.

“All of the inventory numbers were within 1 percent of the average of market analysts’ pre-report estimates. In fact, the differences were no larger that 0.5 percent,” Meyer said.

“While there is nothing really magic about the pre-report estimates, they probably do represent a sense of “market expectations” and, thus, comparing the actual data to them gives us a good idea of what might happen for the nearby futures [next week],” he added.

The report is conducted annually by the USDA’s National Agricultural Statistics Service (NASS), which measures and reports conditions, and trends in the U.S. pork industry nationwide. Surveyed in December, March, June and September of each year, U.S. pork producers and contractors are contacted to gather data about market hog and breeding stock inventories and farrowing intentions.

The USDA gathers data from a sample of producers representing all U.S. facilities with the capacity to raise breeding or market hogs, with U.S. producers in the largest 30 hog-producing states surveyed in March, June and September, and producers nationwide surveyed in December.

According to the USDA, Iowa remains the nation’s leading pork producer, with 17.8 million hogs and pigs raised, up 1.20 million from June 2006. The March-May 2007 pig crop was 4.23 million head, with a total of 460,000 sows farrowed with an average litter size of 9.20 pigs per sow.

As of June 1, the report said Iowa hog producers planned to farrow 460,000 head of sows and gilts in the June-August 2007 quarter, with farrowing intentions for the September-November 2007 period estimated at 470,000.

The USDA also said the nation’s March-May 2007 pig crop hit 27.1 million head, up 2 percent from 2006 and up 4 percent from 2005, with sows farrowing during this period totaling 2.97 million head, up 1 percent from 2006 and up 3 percent 2005.

The report said U.S. sows farrowed during this quarter represented 49 percent of the breeding herd, with the average pigs saved per litter at 9.15 for the March-May 2007 period, compared to 9.08 last year. Pigs saved per litter by size of operation ranged from 7.60 for operations with 1-99 hogs and pigs to 9.20 for operations with more than 5,000 hogs and pigs. U.S. hog producers intend to have 2.96 million sows farrow during the June-August 2007 quarter, up 2 percent from the actual farrowings, and up 1 percent from 2005.
Intended farrowings for September-November 2007, at 2.96 million sows, are up slightly from 2006 and up 2 percent from 2005, the report said.

The USDA also said the total number of hogs under contract owned by operations with over 5,000 head, but raised by contractees, accounted for 39 percent of the total U.S. hog inventory, up from 38 percent last year. All U.S. inventory and pig crop estimates for June 2006 through March 2007 were reviewed using final pig crop, official slaughter, death loss, and updated import and export data.
Based on the findings of the June 29 report, the USDA said adjustments of slightly larger than one-half of one percent were made to the December 1, 2006 and March 1, 2007 total inventory.

Adjustments of slightly more than one percent were made to the September-November 2006 pig crop and less than one-half of one percent to the December 2006-February 2007 pig crop.

The report said U.S. hog slaughter was 4.3 percent higher last week than during the same week one year ago, which was 5.7, 5.7 and 4.3, respectively, the past three weeks. Meyer said those numbers were big increases when 180-lb. and over inventories was 3 percent higher, with the June slaughter (adjusted to equalize weekdays and Saturdays in 2007 and 2006) at 3.7 percent higher this year, which he attributed to higher Canadian pig imports.

“Higher feeder pig imports have added 0.4 percent to U.S. slaughter this year,” Meyer said. “Those pigs would be counted in these inventories and thus that 0.4 percent would be part of our forecast based on these numbers through August.

“But, assuming imports continue above last year at the same pace, we have to add that 0.4 percent to slaughter forecasts from September through year-end to account for this growth,” he said.
Bob Brown, an independent market analyst in Edmond, Okla., said all the weight categories were record-high for the June report except for the under-60s.

“Part of that goes to a record import of live hogs from Canada over the March-May period, which is different than what we were thinking because our pig crops have been down,” he said.

Ron Plain, University of Missouri extension agricultural economist, said another reason for the increase in slaughter in the last half of 2007, compared to 2006, was the larger supply of circovirus vaccine available this year than in 2006, which he expected to lower the death loss.